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Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Thursday, June 4, 2015

Service tax rate on restaurant service

Effective rate of Service tax has increased
from 4.9% to 5.6%, no change in abatement & exemption continued for Non-
Air-conditioned restaurants

Ministry of Finance has issued a circular on
03.06.2015 to clarify the abatement rate on value of service included in
restaurant bill after the increase in change of Service Tax Rate from 12.36% to
14% with effect from 1st June, 2015.

No
change has been made in abatement and the rate of service tax on the abated value so effective service tax rate has increased
from 4.9% to 5.6%. As valuation of service part is 40% as earlier in an
activity of serving of food or drinks by a restaurant or eating joint having
the facility of air- conditioning or central heating in any part of such
establishment so effective rate of service tax is 14% of 40% of the total
amount charged in a restaurant bill.

Further clarified that exemption of service tax shall continue in case of restaurant or eating
joint is not having the facility of air-conditioning or central air heating
in any part of the establishment.